CHICAGO, May 2, 2014 /PRNewswire/ -- United States Cellular Corporation (NYSE:USM) reported service revenues of $853.6 million for the first quarter of 2014, versus $996.3 million for the same period one year ago. Net income attributable to U.S. Cellular shareholders and related diluted earnings per share were $19.5 million and $0.23 respectively, for the first quarter of 2014, compared to $4.9 million and $0.06, respectively, in the comparable period one year ago.
Year-over-year comparisons are affected by the divestiture transaction and the deconsolidation of certain partnerships, both in 2013.
"With our competitive range of plans and strong smartphone selection, including the iPhone, we have had success attracting new customers and increasing smartphone adoption and data use," said Kenneth R. Meyers, U.S. Cellular president and CEO. "This is reflected in higher gross customer additions and average revenue per customer. We're driving our smartphone penetration and data growth strategies by bringing 4G LTE access to 93 percent of our customers in 2014, and offering high-demand devices like the new Samsung Galaxy S5. Network quality is the foundation of our strategy to increase customer additions and build loyalty.
"We've made significant progress to return service levels to our normally high standards following the billing system conversion. While churn is still elevated, we are currently seeing improvements in both voluntary and involuntary churn from peak levels back in 2013 and early 2014. Additionally the new system has already enabled us to deliver more products and services that meet our customers' needs, like our Shared Connect Plans, new no contract Simple Connect Plans, and device installment contracts.
"The industry pricing environment is very dynamic at the present time. However, we're confident that we have the right offerings for our target customers and we'll continue to price them at competitive levels. We have a strong financial foundation that will enable us to support our current initiatives and to continue to invest in our future by further expanding and enhancing our network and retail distribution."
2014 Estimated Results
Capital expenditures for 2014 are expected to be approximately $640 million, down from $738 million in 2013.
Conference Call Information
U.S. Cellular will hold a conference call on May 2, 2014 at 9:30 a.m. CDT.
Before the call, certain financial and statistical information to be discussed during the call will be posted to investors.uscellular.com. The call will be archived on the Events & Presentations page of investors.uscellular.com.
About U.S. Cellular
United States Cellular Corporation provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to 4.7 million customers in 23 states. The Chicago-based company had 6,800 full- and part-time associates as of March 31, 2014. At the end of the first quarter of 2014, Telephone and Data Systems, Inc. owned 84 percent of U.S. Cellular. For more information about U.S. Cellular, visit uscellular.com.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995:
All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: impacts of any pending acquisition and divestiture transactions, including, but not limited to, the ability to obtain regulatory approvals, successfully complete the transactions and the financial impacts of such transactions; the ability of the company to successfully manage and grow its markets; the overall economy; competition; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms; the state and federal telecommunications regulatory environment; the value of assets and investments; adverse changes in the ratings afforded TDS and U.S. Cellular debt securities by accredited ratings organizations; industry consolidation; advances in telecommunications technology; uncertainty of access to the capital markets; pending and future litigation; changes in income tax rates, laws, regulations or rulings; acquisitions/divestitures of properties and/or licenses; changes in customer growth rates, average monthly revenue per user, churn rates, roaming revenue and terms, the availability of handset devices, or the mix of products and services offered by U.S. Cellular. Investors are encouraged to consider these and other risks and uncertainties that are discussed in the Form 8-K Current Report used by U.S. Cellular to furnish this press release to the Securities and Exchange Commission ("SEC"), which are incorporated by reference herein.
|
United States Cellular Corporation
|
|
Total Markets* Summary Operating Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the Quarter Ended
|
3/31/2014
|
|
12/31/2013
|
|
9/30/2013
|
|
6/30/2013
|
|
3/31/2013
|
|
Retail Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of period
|
|
4,174,000
|
|
|
4,267,000
|
|
|
4,343,000
|
|
|
4,412,000
|
|
|
5,060,000
|
|
|
Gross additions
|
|
197,000
|
|
|
176,000
|
|
|
165,000
|
|
|
165,000
|
|
|
191,000
|
|
|
Net additions (losses)
|
|
(93,000)
|
|
|
(71,000)
|
|
|
(60,000)
|
|
|
(120,000)
|
|
|
(74,000)
|
|
|
ARPU (1)
|
$
|
57.59
|
|
$
|
53.53
|
|
$
|
54.64
|
|
$
|
54.18
|
|
$
|
54.85
|
|
|
Churn rate (2)
|
|
2.3%
|
|
|
1.9%
|
|
|
1.7%
|
|
|
2.0%
|
|
|
1.7%
|
|
|
Smartphone penetration (3) (4)
|
|
53.1%
|
|
|
50.8%
|
|
|
47.1%
|
|
|
45.5%
|
|
|
43.5%
|
|
Prepaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of period
|
|
356,000
|
|
|
343,000
|
|
|
370,000
|
|
|
381,000
|
|
|
446,000
|
|
|
Gross additions
|
|
85,000
|
|
|
63,000
|
|
|
65,000
|
|
|
77,000
|
|
|
104,000
|
|
|
Net additions (losses)
|
|
13,000
|
|
|
(26,000)
|
|
|
(11,000)
|
|
|
(7,000)
|
|
|
23,000
|
|
|
ARPU (1)
|
$
|
32.22
|
|
$
|
31.66
|
|
$
|
28.72
|
|
$
|
31.69
|
|
$
|
33.31
|
|
|
Churn rate (2)
|
|
6.9%
|
|
|
8.3%
|
|
|
6.8%
|
|
|
6.8%
|
|
|
6.2%
|
|
Total customers at end of period
|
|
4,684,000
|
|
|
4,774,000
|
|
|
4,875,000
|
|
|
4,968,000
|
|
|
5,736,000
|
|
Billed ARPU (1)
|
$
|
53.93
|
|
$
|
50.25
|
|
$
|
50.92
|
|
$
|
50.60
|
|
$
|
51.13
|
|
Service revenue ARPU (1)
|
$
|
60.19
|
|
$
|
57.05
|
|
$
|
58.36
|
|
$
|
57.45
|
|
$
|
57.63
|
|
Smartphones sold as a percent of total
devices sold
|
|
73.0%
|
|
|
79.6%
|
|
|
65.2%
|
|
|
66.0%
|
|
|
61.7%
|
|
Total population
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets (5)
|
|
54,817,000
|
|
|
58,013,000
|
|
|
84,025,000
|
|
|
84,025,000
|
|
|
93,943,000
|
|
|
Consolidated operating markets (5)
|
|
31,729,000
|
|
|
31,759,000
|
|
|
31,822,000
|
|
|
31,822,000
|
|
|
47,440,000
|
|
Market penetration at end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets (6)
|
|
8.5%
|
|
|
8.2%
|
|
|
5.8%
|
|
|
5.9%
|
|
|
6.1%
|
|
|
Consolidated operating markets (6)
|
|
14.8%
|
|
|
15.0%
|
|
|
15.3%
|
|
|
15.6%
|
|
|
12.1%
|
|
Capital expenditures (000s)
|
$
|
89,581
|
|
$
|
208,135
|
|
$
|
242,459
|
|
$
|
168,497
|
|
$
|
118,410
|
|
Total cell sites in service
|
|
6,165
|
|
|
6,975
|
|
|
7,687
|
|
|
7,748
|
|
|
8,027
|
|
Owned towers
|
|
4,448
|
|
|
4,448
|
|
|
4,422
|
|
|
4,411
|
|
|
4,411
|
|
|
|
*
|
Represents U.S. Cellular's consolidated markets. These results include markets which U. S. Cellular currently consolidates, or previously consolidated in the periods presented, and is not adjusted in prior periods for subsequent divestitures or deconsolidations.
|
|
|
|
Refer to U.S. Cellular's Form 8-K filed on May 3, 2013 for pro forma financial information related to the Divestiture Transaction and the NY1 and NY2 Deconsolidation for the three months ended March 31, 2013, as if the transactions had occurred at the beginning of the period.
|
|
United States Cellular Corporation
|
|
Core* Markets Summary Operating Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the Quarter Ended
|
3/31/2014
|
|
12/31/2013
|
|
9/30/2013
|
|
6/30/2013
|
|
3/31/2013
|
|
Retail Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of period
|
|
4,174,000
|
|
|
4,267,000
|
|
|
4,343,000
|
|
|
4,412,000
|
|
|
4,463,000
|
|
|
Gross additions
|
|
197,000
|
|
|
176,000
|
|
|
165,000
|
|
|
165,000
|
|
|
176,000
|
|
|
Net additions (losses)
|
|
(93,000)
|
|
|
(71,000)
|
|
|
(60,000)
|
|
|
(53,000)
|
|
|
(33,000)
|
|
|
ARPU (1)
|
$
|
57.59
|
|
$
|
53.53
|
|
$
|
54.64
|
|
$
|
54.44
|
|
$
|
54.21
|
|
|
Churn rate (2)
|
|
2.3%
|
|
|
1.9%
|
|
|
1.7%
|
|
|
1.6%
|
|
|
1.6%
|
|
|
Smartphone penetration (3) (4)
|
|
53.1%
|
|
|
50.8%
|
|
|
47.1%
|
|
|
45.5%
|
|
|
43.0%
|
|
Prepaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of period
|
|
356,000
|
|
|
343,000
|
|
|
370,000
|
|
|
381,000
|
|
|
373,000
|
|
|
Gross additions
|
|
85,000
|
|
|
63,000
|
|
|
65,000
|
|
|
76,000
|
|
|
91,000
|
|
|
Net additions (losses)
|
|
13,000
|
|
|
(26,000)
|
|
|
(11,000)
|
|
|
8,000
|
|
|
31,000
|
|
|
ARPU (1)
|
$
|
32.22
|
|
$
|
31.66
|
|
$
|
28.72
|
|
$
|
31.65
|
|
$
|
32.92
|
|
|
Churn rate (2)
|
|
6.9%
|
|
|
8.3%
|
|
|
6.8%
|
|
|
6.0%
|
|
|
5.6%
|
|
Total customers at end of period
|
|
4,684,000
|
|
|
4,774,000
|
|
|
4,875,000
|
|
|
4,968,000
|
|
|
5,005,000
|
|
Billed ARPU (1)
|
$
|
53.93
|
|
$
|
50.25
|
|
$
|
50.92
|
|
$
|
50.98
|
|
$
|
50.93
|
|
Service revenue ARPU (1)
|
$
|
60.19
|
|
$
|
57.05
|
|
$
|
58.36
|
|
$
|
57.88
|
|
$
|
57.14
|
|
Smartphones sold as a percent of total
devices sold
|
|
73.0%
|
|
|
79.6%
|
|
|
65.2%
|
|
|
66.1%
|
|
|
62.1%
|
|
Total population
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets (5)
|
|
54,817,000
|
|
|
58,013,000
|
|
|
84,025,000
|
|
|
84,025,000
|
|
|
84,025,000
|
|
|
Consolidated operating markets (5)
|
|
31,729,000
|
|
|
31,759,000
|
|
|
31,822,000
|
|
|
31,822,000
|
|
|
31,822,000
|
|
Market penetration at end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets (6)
|
|
8.5%
|
|
|
8.2%
|
|
|
5.8%
|
|
|
5.9%
|
|
|
6.0%
|
|
|
Consolidated operating markets (6)
|
|
14.8%
|
|
|
15.0%
|
|
|
15.3%
|
|
|
15.6%
|
|
|
15.7%
|
|
Capital expenditures (000s)
|
$
|
89,581
|
|
$
|
211,247
|
|
$
|
239,332
|
|
$
|
171,166
|
|
$
|
107,907
|
|
Total cell sites in service
|
|
6,165
|
|
|
6,161
|
|
|
6,127
|
|
|
6,113
|
|
|
6,113
|
|
Owned towers
|
|
3,883
|
|
|
3,883
|
|
|
3,857
|
|
|
3,846
|
|
|
3,846
|
|
|
|
*
|
U.S. Cellular's Core Markets excludes the results of the Divestiture Markets and NY1 and NY2 Partnerships for the periods presented.
|
|
|
|
Refer to U.S. Cellular's Form 8-K filed on May 3, 2013 for pro forma financial information related to the Divestiture Transaction and the NY1 and NY2 Deconsolidation for the three months ended March 31, 2013, as if the transactions had occurred at the beginning of the period.
|
|
|
|
(1)
|
ARPU metrics are calculated by dividing a revenue base by an average number of customers by the number of months in the period. These revenue bases and customer populations are shown below:
|
|
a.
|
Postpaid ARPU consists of total postpaid service revenues and postpaid customers.
|
|
b.
|
Prepaid ARPU consists of total prepaid service revenues and prepaid customers.
|
|
c.
|
Billed ARPU consists of total postpaid, prepaid and reseller service revenues and postpaid, prepaid and reseller customers.
|
|
d.
|
Service revenue ARPU consists of total retail service revenues, inbound roaming and other service revenues and postpaid, prepaid and reseller customers.
|
|
(2)
|
Churn metrics represent the percentage of the postpaid or prepaid customers that disconnect service each month. These metrics represent the average monthly postpaid or prepaid churn rate for each respective period.
|
|
(3)
|
Smartphones represent wireless devices which run on an Android, Apple, BlackBerry or Windows Mobile operating system, excluding tablets.
|
|
(4)
|
Smartphone penetration is calculated by dividing postpaid smartphone customers by total postpaid customers.
|
|
(5)
|
Used only to calculate market penetration of consolidated markets and consolidated operating markets, respectively. See footnote (6) below.
|
|
(6)
|
Market penetration is calculated by dividing the number of wireless customers at the end of the period by the total population of consolidated markets and consolidated operating markets, respectively, as estimated by Claritas.
|
|
United States Cellular Corporation
|
|
Consolidated Statement of Operations Highlights
|
|
Three Months Ended March 31,
|
|
(Unaudited, dollars and shares in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Change
|
|
|
|
2014
|
|
2013
|
|
Amount
|
|
Percent
|
|
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
Service
|
$
|
853,613
|
|
$
|
996,349
|
|
$
|
(142,736)
|
|
(14%)
|
|
Equipment sales
|
|
72,198
|
|
|
85,397
|
|
|
(13,199)
|
|
(15%)
|
|
|
Total operating revenues
|
|
925,811
|
|
|
1,081,746
|
|
|
(155,935)
|
|
(14%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
System operations (excluding Depreciation, amortization and accretion
reported below)
|
|
180,607
|
|
|
216,299
|
|
|
(35,692)
|
|
(17%)
|
|
Cost of equipment sold
|
|
270,474
|
|
|
241,691
|
|
|
28,783
|
|
12%
|
|
Selling, general and administrative
|
|
395,564
|
|
|
420,080
|
|
|
(24,516)
|
|
(6%)
|
|
Depreciation, amortization and accretion
|
|
167,753
|
|
|
189,845
|
|
|
(22,092)
|
|
(12%)
|
|
(Gain) loss on asset disposals, net
|
|
1,934
|
|
|
5,434
|
|
|
(3,500)
|
|
(64%)
|
|
(Gain) loss on sale of business and other exit costs, net
|
|
(6,900)
|
|
|
6,931
|
|
|
(13,831)
|
|
>(100%)
|
|
(Gain) loss on license sales and exchanges
|
|
(91,446)
|
|
|
—
|
|
|
(91,446)
|
|
N/M
|
|
|
Total operating expenses
|
|
917,986
|
|
|
1,080,280
|
|
|
(162,294)
|
|
(15%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
7,825
|
|
|
1,466
|
|
|
6,359
|
|
>100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment and other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of unconsolidated entities
|
|
37,075
|
|
|
26,835
|
|
|
10,240
|
|
38%
|
|
Interest and dividend income
|
|
884
|
|
|
903
|
|
|
(19)
|
|
(2%)
|
|
Interest expense
|
|
(14,862)
|
|
|
(10,910)
|
|
|
(3,952)
|
|
(36%)
|
|
Other, net
|
|
86
|
|
|
(215)
|
|
|
301
|
|
>(100%)
|
|
|
Total investment and other income
|
|
23,183
|
|
|
16,613
|
|
|
6,570
|
|
40%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
31,008
|
|
|
18,079
|
|
|
12,929
|
|
72%
|
|
Income tax expense
|
|
12,604
|
|
|
7,369
|
|
|
5,235
|
|
71%
|
|
Net income
|
|
18,404
|
|
|
10,710
|
|
|
7,694
|
|
72%
|
|
Less: Net income (loss) attributable to noncontrolling interests, net of tax
|
|
(1,078)
|
|
|
5,796
|
|
|
(6,874)
|
|
>(100%)
|
|
Net income attributable to U.S. Cellular shareholders
|
$
|
19,482
|
|
$
|
4,914
|
|
$
|
14,568
|
|
>100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding
|
|
84,213
|
|
|
83,838
|
|
|
375
|
|
—
|
|
Basic earnings per share attributable to U.S. Cellular shareholders
|
$
|
0.23
|
|
$
|
0.06
|
|
$
|
0.17
|
|
>100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
85,065
|
|
|
84,588
|
|
|
477
|
|
1%
|
|
Diluted earnings per share attributable to U.S. Cellular shareholders
|
$
|
0.23
|
|
$
|
0.06
|
|
$
|
0.17
|
|
>100%
|
|
United States Cellular Corporation
|
|
Consolidated Balance Sheet Highlights
|
|
(Unaudited, dollars in thousands)
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
2014
|
|
2013
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
398,541
|
|
$
|
342,065
|
|
Short-term investments
|
|
40,056
|
|
|
50,104
|
|
Accounts receivable from customers and others
|
|
484,471
|
|
|
586,595
|
|
Inventory, net
|
|
218,882
|
|
|
238,188
|
|
Prepaid expenses
|
|
65,510
|
|
|
65,596
|
|
Net deferred income tax asset
|
|
99,105
|
|
|
99,105
|
|
Other current assets
|
|
19,702
|
|
|
19,538
|
|
|
|
1,326,267
|
|
|
1,401,191
|
|
|
|
|
|
|
|
|
Assets held for sale
|
|
—
|
|
|
16,027
|
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
Licenses
|
|
1,425,945
|
|
|
1,401,126
|
|
Goodwill
|
|
387,524
|
|
|
387,524
|
|
Investments in unconsolidated entities
|
|
289,842
|
|
|
265,585
|
|
|
|
2,103,311
|
|
|
2,054,235
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
|
|
|
|
|
In service and under construction
|
|
7,715,292
|
|
|
7,717,512
|
|
Less: Accumulated depreciation
|
|
4,939,072
|
|
|
4,860,992
|
|
|
|
2,776,220
|
|
|
2,856,520
|
|
|
|
|
|
|
|
|
Other assets and deferred charges
|
|
132,536
|
|
|
117,735
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
6,338,334
|
|
$
|
6,445,708
|
|
United States Cellular Corporation
|
|
Consolidated Balance Sheet Highlights
|
|
(Unaudited, dollars in thousands)
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
2014
|
|
2013
|
|
Current liabilities
|
|
|
|
|
|
|
Current portion of long-term debt
|
$
|
166
|
|
$
|
166
|
|
Accounts payable
|
|
|
|
|
|
|
|
Affiliated
|
|
9,266
|
|
|
11,243
|
|
|
Trade
|
|
347,459
|
|
|
405,583
|
|
Customer deposits and deferred revenues
|
|
255,230
|
|
|
256,740
|
|
Accrued taxes
|
|
58,574
|
|
|
73,820
|
|
Accrued compensation
|
|
35,930
|
|
|
66,566
|
|
Other current liabilities
|
|
161,446
|
|
|
192,055
|
|
|
|
|
868,071
|
|
|
1,006,173
|
|
|
|
|
|
|
|
|
|
Deferred liabilities and credits
|
|
|
|
|
|
|
Net deferred income tax liability
|
|
830,960
|
|
|
836,297
|
|
Other deferred liabilities and credits
|
|
330,467
|
|
|
315,073
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
878,127
|
|
|
878,032
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests with redemption features
|
|
543
|
|
|
536
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
U.S. Cellular shareholders' equity
|
|
|
|
|
|
|
Series A Common and Common Shares, par value $1 per share
|
|
88,074
|
|
|
88,074
|
|
Additional paid-in capital
|
|
1,429,148
|
|
|
1,424,729
|
|
Treasury shares
|
|
(165,577)
|
|
|
(164,692)
|
|
Retained earnings
|
|
2,061,561
|
|
|
2,043,095
|
|
|
Total U.S. Cellular shareholders' equity
|
|
3,413,206
|
|
|
3,391,206
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests
|
|
16,960
|
|
|
18,391
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
3,430,166
|
|
|
3,409,597
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
$
|
6,338,334
|
|
$
|
6,445,708
|
|
United States Cellular Corporation
|
|
Schedule of Cash and Cash Equivalents and Investments
|
|
(Unaudited, dollars in thousands)
|
|
|
The following table presents U.S. Cellular's cash and cash equivalents and investments at March 31, 2014 and December 31, 2013.
|
|
|
|
March 31,
|
|
December 31,
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
398,541
|
|
$
|
342,065
|
|
|
|
|
|
|
|
|
Amounts included in short-term investments (1)(2)
|
|
|
|
|
|
|
U.S. Treasury Notes
|
|
40,056
|
|
|
50,104
|
|
|
|
|
|
|
|
|
Total cash and cash equivalents and investments
|
$
|
438,597
|
|
$
|
392,169
|
|
|
|
(1)
|
Designated as held-to-maturity investments and are recorded at amortized cost on the Consolidated Balance Sheet.
|
|
(2)
|
Maturities are less than twelve months from the respective balance sheet dates.
|
|
United States Cellular Corporation
|
|
Consolidated Statement of Cash Flows
|
|
Three Months Ended March 31,
|
|
(Unaudited, dollars in thousands)
|
|
|
|
|
|
|
2014
|
|
2013
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
Net income
|
$
|
18,404
|
|
$
|
10,710
|
|
Add (deduct) adjustments to reconcile net income to net cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Depreciation, amortization and accretion
|
|
167,753
|
|
|
189,845
|
|
|
|
Bad debts expense
|
|
20,492
|
|
|
16,910
|
|
|
|
Stock-based compensation expense
|
|
4,955
|
|
|
5,036
|
|
|
|
Deferred income taxes, net
|
|
(4,817)
|
|
|
7,048
|
|
|
|
Equity in earnings of unconsolidated entities
|
|
(37,075)
|
|
|
(26,835)
|
|
|
|
Distributions from unconsolidated entities
|
|
12,818
|
|
|
5,836
|
|
|
|
(Gain) loss on asset disposals, net
|
|
1,934
|
|
|
5,434
|
|
|
|
(Gain) loss on sale of business and other exit costs, net
|
|
(6,900)
|
|
|
6,931
|
|
|
|
(Gain) loss on license sales and exchanges
|
|
(91,446)
|
|
|
—
|
|
|
|
Noncash interest expense
|
|
269
|
|
|
262
|
|
|
|
Other operating activities
|
|
47
|
|
|
250
|
|
Changes in assets and liabilities from operations
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
81,980
|
|
|
33,611
|
|
|
|
Inventory
|
|
19,306
|
|
|
16,750
|
|
|
|
Accounts payable - trade
|
|
(38,245)
|
|
|
4,644
|
|
|
|
Accounts payable - affiliate
|
|
(2,312)
|
|
|
(1,933)
|
|
|
|
Customer deposits and deferred revenues
|
|
(1,510)
|
|
|
8,862
|
|
|
|
Accrued taxes
|
|
(15,403)
|
|
|
6,175
|
|
|
|
Accrued interest
|
|
9,182
|
|
|
9,201
|
|
|
|
Other assets and liabilities
|
|
(75,896)
|
|
|
(75,122)
|
|
|
|
|
|
63,536
|
|
|
223,615
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
Cash used for additions to property, plant and equipment
|
|
(109,498)
|
|
|
(151,024)
|
|
Cash paid for acquisitions and licenses
|
|
(9,135)
|
|
|
(14,150)
|
|
Cash received from divestitures
|
|
103,042
|
|
|
—
|
|
Cash received for investments
|
|
10,000
|
|
|
—
|
|
Other investing activities
|
|
584
|
|
|
3,654
|
|
|
|
|
|
(5,007)
|
|
|
(161,520)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
Repayment of long-term debt
|
|
(23)
|
|
|
(61)
|
|
Common shares reissued for benefit plans, net of tax payments
|
|
316
|
|
|
123
|
|
Common shares repurchased
|
|
(2,000)
|
|
|
(18,425)
|
|
Distributions to noncontrolling interests
|
|
(346)
|
|
|
(2,396)
|
|
Other financing activities
|
|
—
|
|
|
2
|
|
|
|
|
|
(2,053)
|
|
|
(20,757)
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
56,476
|
|
|
41,338
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
Beginning of period
|
|
342,065
|
|
|
378,358
|
|
End of period
|
$
|
398,541
|
|
$
|
419,696
|
|
United States Cellular Corporation
|
|
Financial Measures and Reconciliations
|
|
(Unaudited, dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
$
|
63,536
|
|
$
|
223,615
|
|
Deduct:
|
|
|
|
|
|
|
|
Cash used for additions to property, plant and equipment
|
|
|
109,498
|
|
|
151,024
|
|
|
Free cash flow (1)
|
|
$
|
(45,962)
|
|
$
|
72,591
|
|
|
|
(1)
|
Free cash flow is defined as Cash flows from operating activities less Cash used for additions to property, plant and equipment. Free cash flow is a non-GAAP financial measure which U.S. Cellular believes may be useful to investors and other users of its financial information in evaluating the amount of cash generated by business operations, after Cash used for additions to property, plant and equipment.
|
SOURCE United States Cellular Corporation
Jane McCahon, Vice President, Corporate Relations and Corporate Secretary, 312-592-5379, jane.mccahon@teldta.com, or Julie Mathews, Investor Relations Manager, 312-592-5341, julie.mathews@teldta.com